India: Modi Widens Lead; Goldman Bullish On Rupee, Stocks

By Shuli Ren

Hotly contested political elections, like what we saw in the US in 2008, are much better sports than say, cricket, in your humble blogger’s humbler opinion, though many Indians would disagree.

India‘s general election season is here. The Parliamentary elections will be held between April 7 and May 12, with results to be announced on May 16.

Election polls conducted this year have shown that the business-friendly opposition BJP is widening the lead with 230 seats, up 50 seats from the polls done in the fourth-quarter last year, according to Goldman Sachs. BJP needs only 272 seats to form a government. If they can deliver as the polls suggest, their Prime Minister candidate Narendra Modi can form a strong coalition, needing just a few independent seats and perhaps small regional parties.

India’s stock market and the rupee have rallied this month, on the precise expectation that BJP will end up with a strong win. The S&P BSE 100 Index has gained 6.1% and the rupee is up 2.8% against the dollar. The WisdomTree India Earnings Fund (EPI) rallied 10.2% and the iShares MSCI India ETF (INDA) advanced 7.1%. Barclays estimates that more than $50 billion foreign portfolio money flowed into India in the last three weeks.

If only Modi delivers, celestial light will fall upon India. Goldman Sachs expects India’s economic growth to pick up next year:

We expect a pick-up in GDP growth to 5.5% in FY15E from 4.6% in FY14E. A relatively more stable government [Barron's: a.k.a. a Modi-led strong coalition.] will be key in improving corporate and investor sentiment and in unclogging projects which have been delayed due to the lack of government approvals. The Cabinet Committee on Investments (CCI) has cleared over US$80 billion of projects over the last 15 months, which are gradually coming on-stream.

Current account deficit will narrow, too. Goldman believes India will churn out a current account surplusto the tune of 0.7% of GDP in the first quarter this year, and the rupee will strengthen:

Add a Comment

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comment

There are 17 comments

MARCH 28, 2014 1:10 A.M.

Prashanth wrote:

It is certainly a time for change what as an Indian I wish to see and that can be done with the Modi government. Certainly BJP as a whole is not my pick, though I wish Modi to be the next PM. With a coalition government NDA we last saw with Atal Bihari Vajpayee which is considered the golden period in the past 65years post Independence. Economic stability, encouragement for tech savvy entrepreneurship in all fields, stop being called a developing country but instead reach a point to be called as developed country. Hoping to stay with the Modi vibe for atleast the next 5years and to see a lot more investment on research shall also be a key!

MARCH 28, 2014 2:51 P.M.

Tech wrote:

Modi delivered a solid performance as the Chief of the Gujarat state. If the past is any indication of the future performance, he is the most suitable candidate for the PM's role. Modi is business friendly and unlike many of the past Congress leaders, actually has a backbone! Modi will not only benefit India, but also the US, Japan, China and European countries, that have significant economic ties with India. Although the BJP is infamous (thanks to Congress' propoganda), as a hawkish party, it was during the BJP's rule that ties with pakistan actually improved. Modi has the capability and experience to act in an assertive manner, which may end up resolving quite a few unsolved issues for the country.

MARCH 28, 2014 4:21 P.M.

Venkitachalam Subramanian wrote:

All this talk about Modi becoming PM is absolute zero because of one thing - arithmetic. There are quite a few states like Kerala (20), Tamil Nadu (40), Orissa, W.Bengal, J&K etc where the BJP may not even open its account. Bihar, The seven sisters of the NE, UP, AP, Karnataka etc are states where they will be among also rans. And unlike the Presidential form of Govt like here in the US, his name will not cause a person in Thiruvananthapuram to cast his vote for O. Rajagopal. 230 seats is a pipe-dream. BJP may get betwwen 190 and 210 seats. They will then have to wean away people offering ministerships and all.

MARCH 28, 2014 10:02 P.M.

joe wrote:

I am a Malayalee and I oppose India's illegal occupation. We will kick India out of our country and declare our independence. FREEDOM FOR KERALA, FREEDOM FOR DRAVIDA NADU! India go to hell!

MARCH 29, 2014 7:13 A.M.

kannan wrote:

I M A MALLU . MODI IS OUR NEXT PM..

MARCH 29, 2014 8:41 A.M.

Ajay Gupta wrote:

There is no question that India's salvation lies with Modi. The current government will do everything in its power to disrupt Modi but will fail. Because at the end truth wins and the Sonia Gandhi and her rubber stamps are everything but the truth.

Endless growth in GDP, which is growth in consumption x population on a finite planet already in significant overshoot of natural resources (energy, water, minerals, land) is not possible yet this is the modern religion practiced by economists, politicians and the public at large. Goldman sachs is known for massive fraud and wants to do more of it by further liquidating the planet and the people, China has already been liquidated mostly and now it is India's turn so whoever leads India into more and more growth based on extraction of resources will be preferred by all big businesses.

MARCH 29, 2014 12:49 P.M.

Shirish T. Dhume wrote:

The one unintentional flaw of the internet generation is its ability to give the stupidest segments of our population the loudest voices. Joe is one of them.

MARCH 29, 2014 1:25 P.M.

Jaswinder Singh wrote:

I am a Punjabi Sikh and we want our own independent country and that will be Khalistan, india go to hell.

MARCH 29, 2014 1:47 P.M.

R P wrote:

If India wants to see governance, growth, peace and security, then the only way to achieve is by voting for BJP led NDA with Modi as PM because the corrupt communal congress has wrecked havoc for the 6 decades in general and for the past one decade in particular. So, its time to siphon them down the drain and vote for a BJP led NDA with Modi as PM for development and prosperity. Jai Hind!!!

MARCH 29, 2014 2:06 P.M.

mushes wrote:

I read the article India - Modi widens Lead that is eulogizing India by reporter “Shuli Ren”. I wonder, since when did BJP (Bharat Jalao Party) became business-friendly ? Indian voters know Bharat-Jalao-Party or Badii-Budnaam-Party are famous for staged-encounters, silent-killing and burning of innocent Indians, destruction of existing structures in India, falsely blaming innocent indigenous Indian citizens, spreading hatred for political gains, continuing in caste-discriminatory-practices, subjugation of other religions and falsely claiming Hindu religion to be oldest. @Shuli Ren continues to state that CCI (Cabinet Committee on Investments) has cleared more than $ 80 billion in 15-months. As an ardent viewer of politics and happenings in largest demo-crazy (India), I noted Indian Parliament proceedings were stalled and boycotted by opposition party MPs creating dangaa-fasaad inside Indian Parliament building. I wonder how and why will 800-million-plus Indian voters may lend support to notorious “trouble makers”? Are you taking Indian voters for a ride by falsely portraying economic figures that are unsustainable, when compared to other countries in the region ?

MARCH 29, 2014 2:08 P.M.

mushes wrote:

I read the article - India: Modi widens gap on Emerging Markets Daily, that is eulogizing India by reporter Shuli Ren. I wonder, since when did BJP (Bharat Jalao Party) became business-friendly ? Indian voters know Bharat-Jalao-Party or Badii-Budnaam-Party are famous for staged-encounters, silent-killing and burning of innocent Indians, destruction of existing structures in India, falsely blaming innocent indigenous Indian citizens, spreading hatred for political gains, continuing in caste-discriminatory-practices, subjugation of other religions and falsely claiming Hindu religion to be oldest. @Shuli Ren continues to state that CCI (Cabinet Committee on Investments) has cleared more than $ 80 billion in 15-months. As an ardent viewer of politics and happenings in largest demo-crazy (India), I noted Indian Parliament proceedings were stalled and boycotted by opposition party MPs creating dangaa-fasaad inside Indian Parliament building. I wonder how and why will 800-million-plus Indian voters may lend support to notorious “trouble makers”? Are you taking Indian voters for a ride by falsely portraying economic figures that are unsustainable, when compared to other countries in the region ?

MARCH 29, 2014 2:10 P.M.

Anonymous wrote:

I read the article India: Modi Widens Lead on Emerging Markets Daily, eulogizing India by reporter Shuli Ren. I wonder, since when did BJP (Bharat Jalao Party) became business-friendly ? Indian voters know Bharat-Jalao-Party or Badii-Budnaam-Party are famous for staged-encounters, silent-killing and burning of innocent Indians, destruction of existing structures in India, falsely blaming innocent indigenous Indian citizens, spreading hatred for political gains, continuing in caste-discriminatory-practices, subjugation of other religions and falsely claiming Hindu religion to be oldest. @Shuli Ren continues to state that CCI (Cabinet Committee on Investments) has cleared more than $ 80 billion in 15-months. I wonder how and why will 800-million-plus Indian voters may lend support to notorious “trouble makers”? Are you taking Indian voters for a ride by falsely portraying economic figures that are unsustainable, when compared to other countries in the region ?

MARCH 29, 2014 2:36 P.M.

mushes wrote:

Commentators write under this article, blindly (I repeat BLINDLY) eulogizing Hindutwa and white bearded person, under whose rule, Gujarat suffered the worst riots (in-fact it was a pogrom), wrongly labeled as riots of 2002-Gujarat. The fact is 59-innocent passengers were intentionally burned by so-called KAR-SEVAKS (intoxicated and non-ticketed goons) hired by Bajrang-Dal and Hindutwa to start a riot inside Gujarat by falsely blaming innocent indigenous Indians. How can India progress under Hindutwa who are engaged in HINSAA (violence) from killing of M.K. Gandhi to-date, including killing thousands of innocent Sikhs during the 1984 Anti-Sikh Riot. We know, RSS-goons were carrying Trishul in one hand, and water-bottle in other hand to show to media - when Indira Gandhi was assassinated by Sikh-bodyguard hired by Hindutwa. No-political party on face of this earth would kill OR assassinate it's own leader (PM) and engage in riot. Anyhow the 1984 assassination of Indira Gandhi backfired on Hindutwa-politicians, when Rajiv Gandhi was elected - damping dreams of Hindutwa coming to power. Then they again assassinated Rajiv Gandhi, and are now targeting Sonia Gandhi and Rahul Gandhi SOLELY for POLITICAL GAINS - under cover of corruption, abusing Hindu religioun. Fact is, NITIN GADHKARI ex-head of BJP who was a peon (chaprasi) in RSS, rose to rank of BJP (Bharat Jalao Party) President, only to engage in more corruption - swindling farmer's lands in Maharashtra. What I wrote is only a tip of ICEBURG of CORRUPTION by BJP. Other corruptions / scandals are well-known about Hindutwa / BJP. Bangaru Laxman is a small example, if readers are able to rewind memory. Indian soldier Casket-scandal is another example, and we know who planted bombs in Samjhauta Express Train, killing innocent passengers. We also know, who killed HEMANT KARKARE during Mumbai 26/11 staged TAMASHA - blaming neighbouring country terrorists. We also know BJP-hired goons killed HAREN PANDYA of BJP for a reason. We also know how, FAKE-SANDHVI Pragya Singh Thakur (terrorist and desh-drohee) planted bombs in Malegaon, Maharashtra targeting innocent indigenous Indians, and how HINDUTWA wrongly blamed indigenous Indians for political gains.

MARCH 31, 2014 10:14 A.M.

KRISH wrote:

Our Indian Voters are becoming more and more concious about what is 'Good' and "Bad" for them, and for their country. Several DECADES of the "DYNASTIC RULE" by the Gandhi family is becoming more and more unpopular. Added to these are the black marks being accumulated by the U.P.A. Govt ( United Progressive Alliance ) which is now being referred to by many as "USELESS, POWERLESS ALLIANCE" ) in the form of SCAMS after SCAMS. It started with the "BOFORS SCAM", then came the Commonwelath Games SCAM, then came the COAL GATE SCAM, then came the ADARSH HOUSING SCAM, then came the 2 G & 3 G SPECTRUM SCAM, etc etc and this seem to continue. By and large, such scams involving MISAPPROPRIATION OF SEVERAL THOUSANDS OF CRORES / MILLIONS OF RUPEES of tax payer's money by the present Government, has made this U.P.A. GOVT. MOST UNPOPULAR, and MOST CORRUPT Govt. So, people of India have realised that they NEED A CHANGE AND A STRONG LEADER, like Mr. MODI. So, the entire nation is being "MODI-FIED".

Sooner or Later, Mr. MODI will become the next P.M. for sure. If you look at the way his POPULARITY IS GROWING, by looking at the CROWDS THAT AWAIT, THRONG TO HEAR HIM, one can conveniently CONCLUDE that the B.J.P is going to emerge is the SINGLE LARGEST PARTY. The question whether they will get the absolute majority to form the next government or not, remains uncertain, due to REGIONAL influences, diversity of people of the region, caste feelings, etc etc.

To summarise, INDIA DEFINITELY NEEDS A CHANGE and this time, the U.P.A. Government is going to get UTTERLY DEFEATED. It is even doubtful whether they will get or corss the THREE DIGIT MARK.

Things therefore, narrow don to the fact that whether the B.J.P. would get absolute majority to form the next Government INDEPENDANTLY OR WILL THEY HAVE TO MAKE ALLIANCE WITH LIKE MINDED ALLIES.

In any case, Mr. MODI has all the CREDENTIALS of winning the Gujarath elections THREE CONSECUTIVE TIMES. He has created a "MODEL STATE" which some or many of his opponents a re unable to digest. People of Gujarat are not fools to elect him, three times consecutively, if he has not done anything.

Ofcourse, NO ONE IS PERFECT. He may have many things wrong at his credit, but then WHO IS Mr. RIGHT ? uNFORTUNATELY NO BODAY.

Therefore, the BEST AMONG the Politicians available now is Mr. MODI and he only can provide a STRONG & STABLE Government at the center, check inflation, maintain good Foreign relations, Check Corruption, provide stability & Progress to the weakening economy etc.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. The Barrons.com Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools.